Well, I commend you for offering to "dive in and work" with a developer to fix this addon -- some of the users of this site could use your same willingness to try something and learn something new.
However, in this case, the fix is quite simple, and I'm going to just give you the solution. I know it because I had to fix it myself the first day after the patch. The same problem was driving me nuts!
Open Interface\Addons\BaudAuction\BaudAuction.lua in your editor of choice. (Preferably, one that shows line numbers like Notepad++)
Then go to line 37, and change it from
Code:
Text = select(4,GetItemQualityColor(SearchItem[4]))..(SearchItem[1]or "Unknown");
to
Code:
Text = "|c" .. select(4,GetItemQualityColor(SearchItem[4]))..(SearchItem[1]or "Unknown");
The only difference is at the beginning of the line where it says "|c" ..
Enjoy!